‘Most ethical’ companies include Costco, Safeway, Target

NEW YORK — The Ethisphere Institute’s sixth annual selection of the "World’s Most Ethical Companies" included several of the nation’s top retailers.

Among this year’s list of 145 organizations, Ethisphere — which describes itself as a leading international think-tank dedicated to the creation, advancement and sharing of best practices in business ethics, corporate social responsibility, anti-corruption and sustainability — included Costco, Safeway, Target, Wegmans and Whole Foods.

Each 2012 honoree was chosen for promoting ethical business standards and practices by exceeding legal minimums for compliance, introducing innovative ideas that benefit the public and forcing their competitors to follow suit, according to Ethisphere.

"Each year the competition for ‘World’s Most Ethical Companies’ intensifies as the number of nominations submitted for consideration grows," Ethisphere executive director Alex Brigham said. "This year’s winners know that a strong ethics program is a key component to a successful business model, and they continue to scrutinize their ethical standards to keep up with an ever-changing regulatory environment. Corporate ethics has become much more important globally, as well, and that is reflected in the truly global nature of this year’s honorees."

ALEXANDRIA, Va. — The National Association of Chain Drug Stores is praising lawmakers in Medco Health Solutions’ home state of New Jersey for delivering what NACDS called “a bold and revealing blow” to the PBM’s proposed merger with Express Scripts.

In a resolution passed by the New Jersey Assembly on Thursday, the chamber urged Gov. Chris Christie to oppose the deal, citing the same anticompetitive and anticonsumer concerns that have fueled scrutiny or outright opposition by more than half of state attorneys general, more than 70 members of the U.S. Congress, national consumer groups and employers.

The New Jersey Assembly passed Assembly Resolution No. 64 by a vote of 54-16-8, just one week after its introduction on March 8. The resolution was introduced by assemblywoman Linda Stender, and does not require action by the New Jersey Senate.

In addition to citing statistics related to the predicted loss of New Jersey jobs if Medco is allowed to acquire Express Scripts, the resolution pointed to the merged entity’s market dominance, the anticipated power of the new entity to “steer plan participants to its own mail-order pharmacy” instead of community pharmacies, and the power to drive pharmacy reimbursement “beyond competitive levels” to the detriment of patients’ pharmacy access.

“The New Jersey Assembly deserves tremendous credit for passing this resolution, which demonstrates leadership in the face of tremendous risks for patient care, jobs and competitive markets,” stated Steve Anderson, president and CEO of NACDS. “We would only add that while the resolution described concern for its figure of 7,200 New Jersey jobs related to Medco, retail stores with pharmacies in New Jersey employ more than 84,000 people. Combine those economic considerations with the fact that New Jersey’s neighborhood pharmacies help patients take their medications correctly, improving health and reducing costs by preventing costly forms of care down the road, and the reasons to oppose this merger in the Garden State and across the nation only magnify.”

NACDS also noted that St. Louis-based Express Scripts saw the editorial board of the St. Louis Post-Dispatch write that “the antitrust issues are real.” Columnist Kevin Horrigan subsequently wrote in that paper, “Why are there so many middle-men? Exactly what are they contributing to our nation’s health?” Horrigan’s critique of the proposed merger included his telling admission, “One does so hate to root against the home team.”

SymphonyIRI: Consumers continue to seek value in 2012

CHICAGO — While consumers will continue to define value based on price, other key trends — including new product development, technology, store layouts and shopping patterns — will drive the market in 2012, according to SymphonyIRI research.

In its latest Times & Trends report, "CPG 2011 Year in Review: The Search for Footing in an Evolving Marketplace," SymphonyIRI said that in order to effectively compete in the market, consumer packaged goods manufacturers and retailers should take note of the following predictions:

According to SymphonyIRI’s MarketPulse consumer survey, more than half of shoppers still choose their store based on lowest prices, and 75% noted that price weighs heavily in brand decisions. However, SymphonyIRI said it anticipates that some shoppers will start to open their wallets more if positive economic reports continue;

Consumers will embrace such money-saving behaviors as pre-planning (i.e., making shopping lists prior to trips to the store) and coupon use. Digital media will play an integral role in this trends, SymphonyIRI SVP marketing John McIndoe said;

Retailers in the drug channel will accelerate their format evolution process. SymphonyIRI cited Walgreens converting of some of its stores into food oases as an example. Providing access to healthy food continues to be an area of focus for retailers, especially drug store chains;

Manufacturers and retailers will pass manufacturing price increases on to shoppers, but reaction to potential commodity price deflation is yet unclear;

Private label will continue to account for unit sales in the 22% to 23% range and dollar sales in the 18% to 20% range; and

Manufacturers will expand their focus on innovation as the primary private-label mitigation strategy.

"Evolving economic conditions have brought a polarity to the CPG marketplace," said Susan Viamari, editor of Times & Trends at SymphonyIRI. "There is a sizable consumer segment that is feeling more optimistic about the road ahead, while a similar sized group is expecting a continued deterioration of economic and personal financial health. Among optimistic and pessimistic shoppers alike, all indications point to continued frugality and conservatism in 2012. CPG marketers need to actively respond to these trends with products and strategies that really emphasize their understanding of consumers’ most pressing needs and wants in order to drive purchase behavior and loyalty."

What ways can CPG manufacturers and retailers effectively compete in today’s marketplace? SymphonyIRI said identifying opportunities and risks, evaluating pricing and promotional strategies and exploring opportunities to enhance product assortment will provide manufacturers and retailers with the keys to success:

Manufacturers should re-evaluate sourcing and inputs resources and be on the lookout for opportunities to lower manufacturing costs through innovative sourcing, packaging and product sizing strategies. Retailers, on the other hand, should closely track the evolving competitive set at the channel and retailer level to ensure appropriate product mix and inventory management strategies are maintained;

Manufacturers should continually reassess and adjust pricing to maintain an optimal price gap between private-label and brand-name offerings. Retailers, however, should work with key manufacturer partners to develop cross-promotional opportunities with high-growth categories/brands and/or with key staple products; and

Manufacturers should consider exploring product development opportunities at both ends of the product spectrum, based on existing and emerging product trends. Meanwhile, retailers should align assortment strategies with changing trip mission and product usage trends.

Pulitzer Prize-winner Peggy Noonan, former Florida Gov. Jeb Bush and singer Diana Ross now feature on the schedule for the National Association of Chain Drug Stores Annual Meeting, slated for April 21-24 in Palm Beach, Fla.

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